Brand trust, improved quality and product innovation among the top reasons shoppers are filling their grocery carts with private labels.
Private label food products are getting some much needed attention, especially from young shoppers, according to the Private Label Foods: What’s Driving Purchase? – US, February 2015 report from market intelligence agency, Mintel. Per the report, 42%of Millennials (age 18-36) agree store brand food products are more innovative than name brand products.
Additionally, more than one third (37%) of U.S. shoppers prefer to buy store brand products over brand name products. Store brand food shoppers have positive perceptions of these products, with 63% agreeing they are higher quality than they used to be, including close to 70% of Millennials.
According to the report, many U.S. shoppers agree store brand products stack up against their name brand counterparts both in flavor, packaging and variety of product offering, further blurring the line between the brand types.
“We’re seeing a shift in consumer thinking at the grocery store,” said Mintel food analyst, Amanda Topper. “Name brand power no longer holds the most weight. Quality, price and innovation are carving out a larger portion of consumer mindshare.”
In addition to improved quality and product innovation, it seems U.S. store brand shoppers hold tight to the notions of brand trust and product loyalty. Nearly 70% of all store brand shoppers agree they trust certain store brands more than others, and 64% say once they’ve tried one store brand product, they are likely to try other products. Ideologies of brand trust are even stronger for Millennials who are more likely to buy store brand foods in general (97% v. 94% of all U.S. shoppers).
Profile of a Private Label Lover
In the report Private Label Foods: What’s Driving Purchase? – US, February 2015, Mintel identifies unique groups of the 94% of U.S. shoppers who are private label food buyers, including the Private Label Lover. Consumers who fall into this category seek out products that are lower in price than name brand products, but equivalent in terms of ingredients and quality.
“Cost-savings is a priority for the Private Label Lover consumer segment, but not at the expense of sacrificing quality,” said Topper.
Mintel’s research also reveals, enhancing store brand foods through improved quality, variety of options, and product innovation is key for engaging with Private Label Lovers now and in the future. Functional packaging attributes are important to store brand shoppers, including easy to open (35%), resealable (35%), and easy to store (29%). Private Label Lovers would also like to see more product for the same price (55%) and products made in the USA (45%).
“Along with a move toward healthier eating and better-for-you foods, many private label food products are focusing on clean labels, with easy-to-read ingredients and product claims,” said Topper. “Store brand shoppers are gravitating toward this trend seeking out store brand products that list ingredients they recognize, and feature prominent claims such as organic, low/no/reduced or made with natural ingredients, right on the packaging.”
According to Mintel research, nearly one third of adults who buy store brand foods (30%) indicate no artificial ingredients is a factor they consider when making a purchase. Additionally, the number of private label food products launched between 2009 and 2014 with a low/no/reduced allergen claim has increased 11.7 percentage points and the gluten-free claim has increased 10.5 percentage points, according to Mintel GNPD (Global New Products Database).